Case Note & Summary
The petitioner, M/s. Aakash Laviesh Leisure Pvt. Ltd., was one of the tenderers for the sale of a trust property. The Charity Commissioner, by order dated 21st June 2003, accepted the petitioner's offer and sanctioned the sale at a price of Rs.2.56 Crores, subject to conditions including payment within 6 months. The petitioner paid the full consideration within the stipulated period. However, when the conveyance deed was presented for registration, the Sub-Registrar referred the matter to the Collector for determination of market value under the Bombay Stamp Act, 1958, contending that the market value on the date of execution was higher than the sanctioned price. The petitioner challenged this action by way of a writ petition. The court held that the market value under Section 2(na) of the Bombay Stamp Act is the price the property would fetch in open market on the date of execution of the instrument. The Charity Commissioner's order fixing the price as fair and reasonable was only for a period of 6 months, and after that period, the price may change. Since the petitioner paid the consideration within 6 months, the price of Rs.2.56 Crores was the actual consideration. The court directed the Collector to assess stamp duty on the basis of the consideration actually paid, i.e., Rs.2.56 Crores, and not on any higher market value, unless the Collector finds that the market value on the date of execution was higher than that amount. The writ petition was allowed, and the rule was made absolute.
Headnote
A) Stamp Duty - Market Value - Determination - Bombay Stamp Act, 1958, Section 2(na) - The market value of property for stamp duty purposes is the price it would fetch in open market on the date of execution of the instrument, not the price sanctioned by the Charity Commissioner earlier, especially when the payment period of 6 months has expired and market conditions may have changed - Held that the stamp duty must be assessed on the consideration actually paid or the market value on the date of execution, whichever is higher (Paras 3-5).
Issue of Consideration
Whether the stamp duty on a conveyance deed executed pursuant to a Charity Commissioner's order sanctioning sale at a fixed price should be assessed on the basis of that sanctioned price or on the market value as on the date of execution of the deed.
Final Decision
The court allowed the writ petition and directed the Collector to assess stamp duty on the basis of the consideration actually paid by the petitioner, i.e., Rs.2.56 Crores, unless the Collector finds that the market value on the date of execution of the conveyance deed was higher than that amount. Rule made absolute.
Law Points
- Market value under Bombay Stamp Act
- 1958 is the price property would fetch in open market on date of execution of instrument
- Charity Commissioner's sanctioned price is not conclusive for stamp duty
- stamp duty is payable on consideration actually paid or market value
- whichever is higher
- period of 6 months for payment indicates price may change after that period
